Reliance Jio Reportedly Dragged to CCI by Airtel Over 'Predatory Free Pricing Strategy'

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Reliance Jio Reportedly Dragged to CCI by Airtel Over 'Predatory Free Pricing Strategy'
  • Airtel has termed pricing strategy by Reliance Jio as 'predatory'
  • The letter has accused Reliance Jio of abusing dominant position
  • Reliance Jio has been accused of trying to eliminate small players

Bharti Airtel has reportedly filed a complaint with the Competition Commission of India (CCI) against Reliance Jio Infocomm, questioning the pricing strategy adopted by the Reliance Industries subsidiary. Jio has been accused of trying to create a monopoly for itself as well as causing harm to competition in order to gain profits in the long run.

In a letter to CCI, dated February 2, Airtel has said that Reliance Jio's "predatory free pricing strategy" is meant to injure the competition, as per a report by Live Mint. "It is a strategic business tactic adopted to enhance market power with the objective of eliminating competition which it has succeeded to a large extent during the quarter Oct to Dec 2016 itself," Airtel reportedly said in its letter.

The strategy adopted by Reliance is to "bind" customers with free voice-calling and in the process eliminate the small players to gain more market share, Airtel reportedly said. "Once Reliance Jio obtains a higher market share, it would likely increase the costs or even charge for voice calls since competition will be limited and the customer will be left with lesser number of service providers to choose from," it said, as per the report.

However, as per the report, a Reliance Jio spokesperson has retaliated by saying that this complaint from Airtel is a "clear ploy" to divert attention from its own violation of licensing conditions by denying "adequate POIs (points of interconnect) to Reliance Jio and already announced censure proceedings by Trai against the company." The spokesperson went ahead a step further and accused Airtel of acting against consumer interest by opposing the free voice calls offered by Jio.

"All tariff plans of Jio have been found to be non-predatory by the regulator, so the question of our offerings being predatory does not arise. India's telecom sector has tended to progress due to disruptive innovation brought in by a new comer, but unfortunately, the incumbents led by Airtel have always tried to block such initiatives," the spokesperson was quoted as saying in the report.

Notably, Reliance Jio has reportedly been accused of "indulging in abuse of dominant position" in the complaint letter by Airtel.

Since its launch, Reliance Jio has caused major disruption in India's telecom industry as the free voice calling and data services offers from the company were able to sway customers away from competition. Recently, Vodafone and Idea Cellular admitted that the companies are undergoing merger talks for their Indian operations.

The reported salvo fired by Airtel is only the latest in a string on attacks on regulatory channels, with Reliance Jio recently asking telecom regulator TRAI to "impose highest penalty" on Airtel with accusation that it was grossly exaggerating the value of data in its promotional offer, and was giving misleading tariff ads.


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